The liquidation of 2,099 local firms over the past 18 months should not be considered alarming, since over 6,000 were started up in the same period, according to a Trade Ministry source.

"Liquidation is an ordinary phenomenon," said the ministry's companies comptroller, Salem Khazaleh. "It is pretty natural that some companies go out of businesses and others move in." The source added that most of these companies had been non-starters because potential investors had not kept their side of the bargain. A recent ministry study shows that 2,099 companies with a total capital of JD42.5 million were liquidated last year and during this year's first six months.

These firms mainly operated - or were planning to operate - in the import-export and marketing sectors.

But according to the study, the number of new companies registered during the period in question was almost triple the figure of liquidated firms, standing at slightly over 6,000.

In addition, the official statistics reveal that the total capital of these newcomers exceeds JD200 million.

Most of the firms liquidated were small businesses, in terms of capital, which Khazaleh said had been created spontaneously and then "written off upon the agreement of partners." The study says none of the liquidated firms fell into the public shareholding company category.

That category's capital makes up almost half the total capital in the market, and its investments are concentrated in banking, insurance and large-scale industries.

Only 71 companies, limited liability firms, which come second in terms of total capital in Jordan, were liquidated.

Some businesses, Khazaleh said, might have suffered hard times in the more distant past, but were only liquidated in the period from 1999 to mid 2000.

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amil Jubran, deputy president of the Amman Chamber of Industry, said that as long as the number of newly registered firms outnumbered those which had collapsed, then the situation was positive. — (Jordan Times)